I don’t know about Melbourne being the most affordable city to buy in because there are cheaper suburbs as well as expensive ones in every city. In fact, free newspaper MX ran a poll yesterday posing the question to readers if they believe that Melbourne’s housing is affordable, 80% of the respondents said no.

However, if you’re thinking of buying your own home, now might still be a good time to do so since the government’s First Home Owner’s Bonus of $5000 would only be effective for contracts entered into until the 31st of December this year. Starting next year till the 30 June 2007, the bonus would be decreased to $3000. Add to that the non-income tested grant of $7000 for first home owners and that’s $12,000 that could go towards paying your stamp duty and other fees.

Which made me think about what we went through these past few weeks in our own search for our first home. Here are the things “we learned which wished we knew then” and hope it would help you in your own search.

Get your loan pre-approval first since this would give you a budget to work with. Finding a property you like, going through the negotiation process and then later finding out that you can’t find financing is a big waste of time and effort for everyone involved. Not to mention the disappointment and regret you’d feel to let the opportunity to own the place slip through your hands.

Make a list of must-haves and good-to-haves. If you’re co-owning the property with a partner or a spouse, talk about what you both want and make a list. In our case, we both want a 3-bedroom free-standing brick house (or 2 bedrooms plus a study) with a low-maintenance yard in a quiet street. My only must-have is that the property should be near public transport and my want-to-have is that the interior of the house be well-lighted, making the best possible use of any natural light coming in. Gj’s must-haves are that the house be a modern one (no Edwardians, thank you very much) and that the bathroom is clean and well-maintained. He also prefer that the house be a low-maintenance one (meaning no floating floorboards), comes with appliances like air-conditioning and dishwasher and that the property be situated in a neighbourhood with other modern houses (possibly a new estate).

Browse through real property sites such as RealEstate.com.au and Domain.com.au to look for properties and neighbourhoods that suit your needs. Go to open inspections and if you plan on bidding at auctions, go to auctions as an observer as well.

Once you’ve narrowed down your search to a few good neighbourhoods, sign up for email alerts in RealEstate.com.au and Domain.com.au to be instantly alerted when new properties go on the market.

Buy the weekend newspapers to have a good idea of how much similar properties are worth in the suburb you’re interested in. RealEstate.com.au’s Sold properties section is also a good place to go. Note that prices listed may not be entirely accurate but a price range or a near enough listed price would be better than having no idea at all. Alternatively, you could buy home price guides for a fee.

If you know someone who lives in the neighbourhood you like, ask if you could have their copies of the weekly community paper. These community papers usually have a real estate section listing the properties on the market and developments in new estates. These papers are also a good source of news articles about the area, the people who live there and their concerns/problems.

You may also talk to real estate agents and tell them what your requirements are. You could request them to contact you once a property that may match your needs goes into the market.

Shortlist the properties that you’d want to inspect. Most properties are open to inspection at the same time (for us it was on Saturdays between 11:00 to 3:00) and you may have to decide which ones are worth visiting and which ones you could afford to skip.

After inspecting a property, create a sketch of the house’s layout to help you remember how it looks like. Make notes of what you like and don’t like about the property. These notes would be a quick way to eliminate the properties that doesn’t suit your needs and the ones that may need some work but could possibly be in your shortlist. Agents usually contacts you several days after the inspection and ask you what you think of the property, your notes would be a handy reference in this instance as well.

Visit the property more than once. Real estate agents worth their salt know this and expect you to do so. The real estate agent of the house we bought asked us our first impressions the first time we visited the property and gave us his contact details, saying we could arrange for additional inspections anytime. Overall, we inspected the property twice, did several drive-bys on different times of the day, once at night when we parked near the house and strolled around the neighbourhood.

Know when to compromise when buying an existing house. Unless you build your own house, the properties you see on the market would always have one or two points against it. Even if you build from scratch, there are no guarantees that what you build would be the perfect house you picture in your mind. For us, the property we eventually ended up with met all the items in our must-have list but came short in the good-to-have department. We made a second inspection and studied the floor plan of the house, figured that the good-to-haves could easily be added in later and made sure we’re happy with the property as it is in the meantime.

Recognise a hard sell and know when to walk away. Give yourself time to think about the purchase and if the agent is pressuring you to sign before you are sure, it may be better for you to walk away. The agent of the first house we made an offer on was quite pushy and would like us to sign immediately. We’ve inspected that house once that afternoon and he told us that there was this other couple who have already put in an offer and that we should put in an offer before the day ends if we liked the property. We liked the property but wasn’t sure about the suburb since it’s still fairly underdeveloped. We called him later that day and he said that we should sign a contract note immediately, we asked if we could do the signing the next day since it’s already quite late but he kept on insisting that he could go over to our place to have the papers signed. In the end, we said no (maybe to his great shock and disappointment). Thinking about it now, we’re better off with the property we ended up with compared to that first house and saying no then paid off.

There would always be ‘another couple’. Gj was telling some office colleagues about his experience with the pushy real estate agent mentioned above when a colleague who has recently bought a property for his daughter said that there would always be that other couple. He said that he had made several offers and every single time, the agent would make mention of this other couple who is also interested on the property and may be willing to pay more than he was offering. True or not, his advice is that we should only make an offer of what we think is a fair price for the property.

Have a backup plan, or what I call ‘the other property we like’. In our case, we’ve narrowed down the list to two properties in the same neighbourhood with the first property having a better street location and being the nearer match to our must-haves and good-to-haves list. If the sale of this property fell through, we thought that we’d make an offer for the second property and be happy with it too. We were lucky that both properties were for sale at the same time. If you can’t find another property that closely match your needs, you could always opt to wait for another property to come up. Your first choice may be bought by someone else in the intervening time though so make sure that you’d be okay with missing out on that purchase.

It may be better to consult with a conveyancer or solicitor first before signing rather than after. It is not uncommon for prospective buyers to sign a contract note and be given 3 cooling-off days to get out of the contract after consulting a conveyancer or solicitor (in private sales only, no cooling off period applies for auctions). The cooling off period comes with a small price though, if you back out within the cooling-off period, the seller can withhold $100 of your deposit or 0.2% of the purchase price, whichever is more according to the Law4u site. In our case, we had a conveyancer read the section 32 before signing (which means there won’t be a cooling-off period for us anymore since we’ve consulted with the conveyancer already prior to signing) but at least we don’t lose anything between the time that the conveyancer receives the documentation and the time we signed.

As with most everything else, any research you do will pay off in the end. We’ve read several books, browsed through numerous websites, watched videos and talked to some very helpful people. Aside from the list I’ve posted before, here are a few other references we found useful: